Denver Condos Got Cheaper This Year. Why the HOA Budget Matters More Than the List Price

In Colorado, a buyer has no right to see a condo association's governing documents until the purchase contract is signed. The Colorado Division of Real Estate says there is no central place to find HOA documents in the state. Before a contract exists, a prospective buyer can only ask the seller, through the brokers, to share copies voluntarily. So the budget, the reserve balance and the insurance setup that now decide whether a unit can be financed usually show up after you have agreed on a price.

This fall the timing matters more than usual. Fannie Mae and Freddie Mac changed how they review condo buildings for loan applications dated on or after August 3, 2026. A stricter reserve minimum applies to applications dated on or after January 4, 2027. Many associations are adopting their 2027 budgets between those two dates. Denver condos did get cheaper this year. Whether a particular unit is a bargain depends on a document most buyers will only see once they are under contract.

The discount is real, and it is uneven

The Denver Metro Association of Realtors' September 2026 report, released October 3, puts the median close price for attached homes at $365,500. That is down 6.28% from September 2025. Attached homes carried 7.21 months of inventory, compared with 4.76 months for the market overall. In August 2026, attached homes spent a median 45 days in the MLS, compared with 24 for detached homes, and attached inventory was up 9.94% from a year earlier.

Within Denver city limits the decline is steeper. The Denver Gazette reported in July on an analysis by Cooper Thayer, who advises both DMAR and the Colorado Association of Realtors on their monthly reports. In Denver, median condo prices for sales through July 20 sat about 14% below their 2020 to 2022 peak. Price per square foot was down around 22% to 23%. Thayer told the paper the problem is "isolated to a specific product in multifamily urban condominium environments, where insurance and HOA dues are a big inhibiting factor." He said smaller townhomes were less affected and single-family homes were near all-time highs.

He also gave a speed comparison. In June 2022, on trailing averages, the typical Denver condo sold in about a week and closed slightly above its original asking price. By June 2026 it took nearly seven weeks and closed about 5% below the original price. Thayer also said this: "There are many buildings with associations that are well funded and have reserve balances that allow them not to raise HOA fees, and they can be good buys." That sentence explains most of what follows. Inside the citywide average, a building's finances are pulling some units down much harder than others.

The lender's calendar now runs through the HOA

Fannie Mae's Lender Letter LL-2026-03 and Freddie Mac's Guide Bulletin 2026-C were both issued March 18, 2026. They change how a building qualifies for conventional financing. The key dates:

Fannie Mae's letter explains why it made the changes:

"Condo projects with inadequate reserves typically do not have the requisite resources to maintain the physical condition of the project or to fund unexpected operating expenses. As a result, unit owners can experience substantial financial hardship from unexpected special assessments or higher regular assessments or dues, leading to mortgage default or foreclosure."

Limited Review was how most condo loans got approved. In a September 17 HousingWire opinion piece, Kelly Welch of Equity Resources wrote that members of the Community Home Lenders of America estimated 60% to 80% of condo originations used it. In July, that group joined the Community Associations Institute and the National Association of Mortgage Brokers in asking regulators to delay the changes. They warned that Full Reviews could add paperwork, time and cost, possibly more than $1,000 for some borrowers. They also said the later reserve increase could push dues higher.

Here is how the 15% rule plays out in practice. Take an association that budgets $400,000 a year in assessment income. Under the old floor, it needed to put $40,000 a year toward capital reserves. Under the new one, it needs $60,000. The association can raise that $20,000 by increasing dues, cutting other spending, or a mix of both. If it does neither, a buyer applying after January 4 may find the building no longer qualifies for a conventional loan.

Why a fall budget vote decides a January sale

Colorado's Common Interest Ownership Act makes a new budget easy to pass. Within 90 days after adopting a proposed budget, the board must send owners a summary and schedule a meeting to consider it. Unless the declaration says otherwise, the budget is approved unless a majority of all owners votes to veto it, and this applies whether or not a quorum shows up. If owners do veto it, the last budget that was not vetoed stays in effect.

Colorado also does not require reserve studies. The Division of Real Estate says the Act only requires an association to have a policy stating when a study will happen, whether there is a funding plan for the recommended work, and whether the study is based on physical and financial analysis. An internally prepared study counts. In 2022, HB22-1387 would have required reserve studies. The governor vetoed it on May 27, 2022.

So state law does not require a Colorado condo building to fund reserves at any particular level. Since August, federal lending rules do require it for any building that wants buyers with conventional loans. The 2027 budget an association adopts this fall shows which standard its board is following.

Where the buyer actually sees it

The Colorado Real Estate Commission's current Contract to Buy and Sell Real Estate (Residential) became mandatory January 1, 2026. Its deadline table lists two separate dates, the Association Documents Deadline and the Association Documents Termination Deadline. The parties set both. The second date is generally the buyer's deadline to back out over what the association documents show. If the documents arrive after the Association Documents Deadline, the contract gives the buyer 10 days after receipt to terminate, subject to the contract's limit tied to the closing date. Set both too close together and you are under time pressure. Leave room between them and you have time to read the documents carefully.

The Division's template for requesting association records points to the documents that matter most under the new rules. Read them in this order:

1. Current budget. Find the reserve contribution line and compare it with total assessment income. The 15% floor for applications dated on or after January 4, 2027 is calculated on that income.
2. Financial statements and reserves. These show whether the reserve balance is growing or being spent down.
3. Reserve study, if one exists. Under Section 38-33.3-317, an association must keep its most recent study only "if any." If the budget funds below the study's highest recommended level, it fails the post-August 3 test.
4. Regular and special assessments. Freddie Mac's established-project section limits delinquency on each special assessment to no more than 15% of units being 60 or more days late.
5. Insurance information. Check the per-unit deductible against the $50,000 cap. When a master policy has a per-unit deductible, Fannie Mae requires an HO-6 policy with coverage at least equal to that deductible.
6. Board and owner meeting minutes. This is where any discussion of the 2027 budget, dues increases or deferred repairs will show up.

There is a separate mechanism worth knowing about. On written request, Section 38-33.3-316(8) requires the association to provide, within 14 calendar days, a binding statement of unpaid assessments currently levied against the unit. It tells you what the seller owes. It does not tell you what the building will need next year.

What a non-qualifying building does to the price

When a building can't qualify for conventional financing, fewer people can buy its units. In September, United Wholesale Mortgage expanded financing for non-warrantable condos and launched an eligibility tool for brokers. CEO Mat Ishbia warned that retiring Limited Review could shrink the buyer pool and slow closings. Specialty financing gives some buyers another way in. It does not bring back the whole conventional buyer pool.

Renting is also competing hard. Thayer told the Gazette that buying in Denver costs about 80% more than renting. He said the flood of new rental apartments that arrived in 2024 widened that gap. A building with high dues and thin reserves is competing for the same buyer as a new lease-up down the street. It is also trying to sell to fewer lenders than it could a year ago.

That makes two units with the same list price on the same block a very different purchase. One sits in a building that funds reserves above the new floor and has a deductible within the cap. The other has a thin reserve line, so its sale depends on whether the 2027 budget fixes the gap or the next buyer finds a specialty lender. On average, the September median of $365,500 combines both kinds of building. For any one unit you are pricing, the median tells you very little.

Common questions

Does the 15% reserve rule apply to my purchase now? It applies to loan applications dated on or after January 4, 2027. Applications dated on or after August 3, 2026 already face the end of Limited Review and the stricter reserve-study standard.

Are small buildings treated differently? Yes. Fannie Mae expanded its Waiver of Project Review to projects with 10 or fewer units. Projects with five to 10 units must not be part of a master association or larger development. Freddie Mac expanded its Exempt-from-Review path to projects of two to 10 units, with added conditions for projects of five to 10 units.

Are townhomes affected the same way? Thayer told the Gazette that smaller townhomes are less affected than urban condominium buildings. Ask your lender whether the project review rules apply to the community you're considering.

If you're weighing a Denver condo this fall, Ryan Haarer can help you structure the Association Documents deadlines so there's time to read the 2027 budget and reserve line before you're committed. If you're selling, he can help you show buyers your building's financial health with the same care he puts into marketing the unit. Book a consultation.